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Lawmakers Seek to Insulate Employers from Wellness Program Lawsuits

By Melanie Zanona, CQ Roll Call

March 3, 2015 -- A group of lawmakers introduced legislation last week to clarify how employers can implement voluntary wellness programs that offer workers financial incentives without violating anti-discrimination and disability laws.

The companion measures in the House and Senate come in the wake of an Equal Employment Opportunity Commission (EEOC) lawsuit against Honeywell International Inc. for assessing insurance surcharges for employees who don't participate in various medical testing.

The Senate Health, Education, Labor, and Pensions Committee held a hearing on the issue in January, during which Chairman Lamar Alexander hinted legislation might be forthcoming.

"More and more, employers are using outcomes-based programs to make health insurance less expensive for their employees," the Tennessee Republican said in a press release after the bill's introduction. "Nearly half of all large employers say they plan to offer one of these innovative plans in 2015, making it even more important to eliminate confusion caused by the EEOC and restore certainty for employers who want to reward their employees for leading a healthy lifestyle."

The 2010 health care overhaul allows companies to offer discount health insurance premiums of up to 30 percent to employees who maintain a healthy weight, keep cholesterol levels low, or quit smoking, among other goals.

The provision is part of a broader effort to encourage employee wellness programs, which can offer incentives such as health screenings and discounted gym memberships for achieving fitness targets. Supporters say the initiatives can drive down health costs and enhance workforce resiliency.

But some critics fear the programs may discriminate against individuals with physical or mental disabilities who are unable to meet certain goals, or force employees to provide sensitive medical and genetic information unrelated to their job duties.

The mounting concerns and lawsuits have caused some employers to question whether they can implement wellness programs without being sued by the EEOC. Bill sponsors maintain their recent introduced legislation would provide clarification on the matter.

The underlying measure, sponsored by Alexander in the Senate and Minnesota Republican John Kline in the House, would reaffirm that employers can offer wellness programs that are tied to financial incentives and allow employees' spouses to participate as well. It would give employees up to 180 days to request and complete an alternative program if it is medically inadvisable or unreasonably difficult for them to participate, according to a summary.

However, bill sponsors say the legislation would preserve the EEOC's authority to enforce civil rights laws among the programs.

"Employee wellness programs not only help control the cost of health insurance, but they also promote healthy lifestyles," said Kline, chairman of the House Education and the Workforce Committee, in a statement. "Remarkably, executive overreach by the EEOC is actually punishing employers for offering wellness plans."

Although no Democrats have signed on as co-sponsors, wellness programs enjoyed bipartisan support in the health law and any measure to strengthen or clarify those provisions could see similar praise. The health overhaul already safeguards against discrimination by requiring employers to provide a "reasonable alternative" for those who cannot participate.

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